Large order worth a billion dollars accelerates Siemens Energy's commencement

In a significant development for the renewable energy sector, Siemens Energy has secured a contract worth over 1 billion euros for a power project on the Baltic Sea island of Bornholm. The project, dubbed the "Bornholm Energy Island" (BEI), aims to create an electricity hub transmitting offshore wind power to both Germany and Denmark.

The project, estimated to cost around 7 billion euros, will see the construction of submarine cables with a capacity of 2 gigawatts (GW) to a future transformer station at the Greifswalder Bodden in Germany. Simultaneously, a 1.2 GW line will connect the project to the Danish island of Zealand.

The larger portion of the future power produced in the wind farms off Bornholm will flow to Germany, a decision that was originally met with uneven cost distribution between Germany and Denmark. However, renegotiations and EU funding have helped address these concerns. The EU has provided around 645 million euros to Energinet, the Danish transmission system operator, to reduce the Danish investment cost share.

The German federal government will assume liability in case of disruption or maintenance work on the international offshore network connection to Germany. This liability assumption is a prerequisite for successful tendering of the wind farm areas off Bornholm and is crucial for efficient offshore interconnection between the North and Baltic Sea coastal states.

The contract between Energinet, 50Hertz, and Siemens Energy includes plant design, manufacturing, transport, installation, testing, and commissioning until the mid-2030s. Siemens Energy will deliver four converters for the BEI project.

The project, initially encountering delays, is now expected to extend until the mid-2030s. Following the announcement of the contract, the stock price of Siemens Energy rose by around 2.75%.

50Hertz, a subsidiary of the German energy company EnBW, is managing the project on the German side. The timeline of the project and its significant scale underscore the growing importance of offshore wind energy transmission and the collaborative efforts of countries in the European Union to achieve renewable energy targets.